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Protocols and institutional architecture

David Brooks, the columnist for the New York Times, has a column on "protocols", and the nature of an economy built on protocols rather than products. This is a spin on the information economy, as discussed by Hal Varian and others. It makes the point that protocols are more and more pervasive, in the form of computer programs that manage aspects of business, to the procedures followed to have a franchise operation conform to the parent standards. They have commonality with other information constructs in that they require effort to initialize, but almost nothing to replicate.

This seems to fit nicely with the idea of an institutional architecture, as explored here. I am thinking that this notion of a protocol is a subset of what we are calling institutions. This seems reasonable, given that one of the sources Brooks cites is Douglas North, who is the source of the institutional idea as used here. North is also cited by Oliver Williamson, Nobel laureate, who is a key thinker in the foundations of the firm.

Th subset of institutions that involve protocols would include anything that dictates fine-grained behavior. So the idea of a market is a generic institution, but a particular clearing mechanism would be a protocol that helps enable the overall institution.